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The Engagement Letter For Audit Services is a crucial document required at the commencement of any audit engagement in Canada. It serves as the foundation of the auditor-client relationship, establishing clear expectations and responsibilities in accordance with Canadian Auditing Standards (CAS), particularly CAS 210. This document is necessary when a new audit engagement begins, when there are significant changes to the audit scope or terms, or when reappointing auditors under modified terms. The letter must comprehensively address audit scope, objectives, responsibilities, reporting requirements, and fee arrangements while ensuring compliance with provincial regulations and professional standards set by CPA Canada. It provides legal protection for both parties and serves as a reference point throughout the audit engagement.

1. Letterhead and Date: Audit firm's letterhead and current date

2. Addressee: Addressed to those charged with governance or appropriate representatives of management

3. Introduction: Opening paragraph identifying the client and establishing the purpose of the letter

4. Audit Scope and Objectives: Clear description of the scope of the audit and the intended objectives, including reference to applicable financial reporting framework

5. Auditor's Responsibilities: Detailed explanation of the auditor's responsibilities, including conducting the audit in accordance with Canadian Auditing Standards

6. Management's Responsibilities: Outline of management's responsibilities regarding financial statements, internal controls, and providing access to information

7. Reporting Expectations: Description of the expected form and content of the auditor's report

8. Timeline and Deadlines: Key dates and deadlines for the audit process

9. Fees and Billing Arrangements: Detail of fee structure, billing arrangements, and payment terms

10. Confirmation Request: Request for acknowledgment and acceptance of the terms

11. Signature Block: Space for both parties' signatures and date of acceptance